Buried deep in Cabinet papers released with Sir Bill English’s radical review of Kāinga Ora is a two-line table that stood out like the proverbial canine’s family jewels.
The table, from the minutes of the Cabinet 100-day Plan Committee’s meeting on December 13, shows approval for a “fiscally neutral adjustment” to pay for the three-month English review of KO and public housing.
One of the two lines said the cost of the inquiry would be up to $500,000.
The other showed exactly what would be cut in the Ministry of Housing and Urban Development budget to pay for it.
That second line simply said the half million-dollar allocation would be taken out of HUD’s budget line for ‘provision of transitional housing places’.
Transitional. Housing.
The urgent housing for people with nowhere to go, the budget for some of the motels that governments have had to use for years, the funding line to community providers to take in those on the edge.
The HUD website defines transitional housing as providing “temporary accommodation for individuals and whānau who don’t have anywhere to live and urgently need a place to stay. It also offers tailored support to help these individuals and whānau into longer-term housing”.
At face value, it seemed unlikely that a fee of up to half a million dollars to pay consultants would come from that line, from funding those needs.
The sum, in itself, is not of great moment. High-powered reviews cost plenty. They can deliver savings and benefits vastly higher than the small change in Government budgets that they might represent.
And, as it turns out, English’s three-person team has come in at close to half the amount provided for, at $274,000 and counting.
English, businessman Simon Allen and urban development expert Ceinwen McNeil did their work for $2500 (English) and $2156 a day and seemed to have been a model of fiscal efficiency.
The only breakdown of their charges included with the Cabinet papers is a table showing English had billed for 26 days’ work, or nearly $65,000, McNeil 23 days and Allen, 21.
But politically, for a National-led Government which, as late as Tuesday afternoon in the House used the number and cost of motels used to house those in need to bash Labour as inept and uncaring, dipping into the transitional money pot seemed pointed.
It could have been deliberate, a Cabinet exasperated by a Labour-bequeathed spend of $1m a day on motels, deploying a half-day’s expenditure from that fund to upend the housing chess board.
In the world of Yes Minister, it might have been a suggestion from the ministry itself, realising how politically sensitive and thus unpalatable it could be to cut money from the transitional fund.
The committee’s minutes indicate the money was deemed a ‘non-departmental output’ and likely would have been headed for Community Housing Providers, ironically the independent organisations favoured by National among alternatives to Kāinga Ora state housing.
But that was actually the ‘fiscally-neutral adjustment’ agreed to by the committee, according to those meeting minutes.
The 100-day plan committee that day was chaired by Prime Minister Christopher Luxon, and attended by Cabinet heavyweights from his deputy, Winston Peters, Finance Minister Nicola Willis and Housing Minister Chris Bishop to Shane Jones and Nicole McKee.
A spokesperson for Bishop told Newsroom: “The review cost of approximately $274,000 amounts to about 0.07 percent of the total transitional housing appropriation, which is $410 million.
“The savings were identified by HUD as part of forecasting the total spend for transitional housing in the current financial year.”
But Labour’s former housing minister Megan Woods was taken aback when advised of the table in the Cabinet committee minute.
“Monstrous,” she exclaimed, saying Labour would “never have used that funding for such a reason”.
“It just shows you, so clearly what this Government’s priorities are … especially spending it on a smokescreen report like the one they’ve released.”
Woods, who was minister until November, said it was highly unlikely that the transitional housing budget line was not fully needed or had been underspent somehow after the change of government.
The structure of the English review, whose report is not substantial at just 37 pages when shorn of its glossary and appendices, was not the preferred approach of the Treasury.
A Treasury paper released with the report on Monday shows the agency preferred a high-powered committee of government officials on a “rolling” series of inquiries into Kāinga Ora and housing.
It advocated “a very senior former public service official” supported by a cross-agency working group and “any expert consultants required”.
The review found the country’s social housing system was “not socially or financially sustainable and it is not delivering the homes and support people need”. It said Kāinga Ora had borrowed substantial sums rapidly with little evidence the added investment was improving service provision. It said the system was opaque, had little attention to value for money and was not financially viable.
The English review went much wider than examining the financial challenges and performance of KO. It recommended radical changes to the way public or ‘social’ housing is purchased, and transferring large numbers of existing homes to four new Crown companies that it is calling Community Housing Associations to also build and manage homes.
Cabinet will hear analysis and recommendations on those ideas by August from Bishop, and could then implement changes, if adopted, over the next two years.
A detailed report, ‘Government looks for a TKO of Kāinga Ora’ will appear Friday on Newsroom Pro.
This is shocking – but is not the only example of corruption that has been happening since 24 November. I love how they keep calling this an “independent review” when English chairs a couple of companies that will no doubt try and make money from the recommendation for more social providers and less provision by government. And his daughter also has her fingers in the “social investment” pie. “Social investment” is complete tosh. There are no examples of it having ever succeeded anywhere else in the world and it is a total distraction from the real issues of wealthy inequality and labour exploitation. Yet the media are happy to support the charade. “Trickle down economics” anyone?
I wonder if all the negative response to a government who inherited billions of dollars of debt will ever please everyone. Good luck to them I say.
We are a very small country in the throw of things globally, we pull above our weight. Negative comments or whining never used to fly so high in this country that I grew up in from the 60s. Boy have times changed.
Good luck to any Government trying to run this country’s future.
I’m not sure why you think the debt loading is the structural issue when our govt debt to gdp position is well under the OECD average.
let me guess, you were the negative comments go to before 14 October? and how much debt did NZ First-Labour inherit in 2017? 80 billion wasn’t it? as one of the commenters below notes, we are below the OECD average in debt to GDP ratio – we have a huge underinvestment in critical infrastructure (Finance Minister English decided that excrement sliding down hospital walls was acceptable, as was selling off state houses, and shares in our power generators…)
The ‘trickle down’ tends to evaporate in the saunas and spas of the uncaring wealthy .
Reduce, reuse, recycle. I agreed with Peter, you’ll never satisfy the wingers who want other people to always put it right for them. We all need to get more resourceful with what we’ve got. And don’t get me started on the sheeple argument that ‘we’re only as bad as everyone else in the OECD now’ as we rush headlong into generational debt, and begin putting our necessities of life infrastructural assets on the open market
New Zealand banks are mostly overseas owned. Most of the public shares in NZ’s electricity companies are overseas owned. Most of NZ’s food is exported overseas, often by overseas-owned companies. This government is ideologically driven to privatise anything for overseas ownership, for the instant private cash. To even where landlords are renters on their own land. Nationalise the banks! Nationalise the electricity! Initiate a national not-for-profit supermarket chain, come on National, it’s in your name. (And subsidise the vegetables!).